On January 1, 2007, Ausser Ltd. acquires 40 percent of the outstanding voting shares of Aussee Inc. for $400,000. Ausser accounts for its Investment In Aussee using the equity method. Ausser has no commitments to provide any type of financial support for Aussee subsequent fiscal periods. During the year ending December 31, 2007, Aussee experiences a Net Loss of $1,500,000. During the year ending December 31, 2008, Aussee has Net Income of $800,000. No dividends were paid in either year. Provide the journal entries to record Ausser's Investment Income (Loss) for the years ending December 31, 2007 and December 31, 2008 and calculate the balance in the Investment in Aussee account as at December 31, 2008
On January 1, 2007, Ausser Ltd. acquires 40 percent of the outstanding voting shares of Aussee Inc. for $400,000. Ausser accounts for its Investment In Aussee using the equity method. Ausser has no commitments to provide any type of financial support for Aussee subsequent fiscal periods. During the year ending December 31, 2007, Aussee experiences a Net Loss of $1,500,000. During the year ending December 31, 2008, Aussee has Net Income of $800,000. No dividends were paid in either year. Provide the journal entries to record Ausser's Investment Income (Loss) for the years ending December 31, 2007 and December 31, 2008 and calculate the balance in the Investment in Aussee account as at December 31, 2008
Chapter8: Consolidated Tax Returns
Section: Chapter Questions
Problem 25CE
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On January 1, 2007, Ausser Ltd. acquires 40 percent of the outstanding voting shares of Aussee Inc. for $400,000. Ausser accounts for its Investment In Aussee using the equity method. Ausser has no commitments to provide any type of financial support for Aussee subsequent fiscal periods. During the year ending December 31, 2007, Aussee experiences a Net Loss of $1,500,000. During the year ending December 31, 2008, Aussee has Net Income of $800,000. No dividends were paid in either year. Provide the
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT